Online account and electronic payments on the rise: digitization is growing

Since the beginning of the Covid-19 emergency, cash payments seem to have undergone a decisive decline in favor of online transactions. The race to digital during the lockdown has pushed many people to rely on an online account to avoid having to leave the house when not strictly necessary.

Since the start of the pandemic, the digitalization of payments has been accelerating – essentially out of fear of gatherings in shops and to reduce the number of contagion opportunities. The use of Internet banking platforms has contributed decisively, helping to reduce queues at the counters thanks to the possibility of receiving assistance via chat.

Despite the strong push of digital payments in recent years,the reluctance to give up cash is a cultural affair. Currently two out of three transactions take place using cash, which is representative of the fact that in many cases the prejudice against electronic payments exists.
However, according to a survey carried out by Nomisma, during the lockdown there was a 40% drop in cash transactions and a consequent increase in digital payments. The average receipt has dropped significantly, a sign that electronic tools are also used for small expenses, which can be tracked thanks to the online account.

The data collected confirm a trend already underway in 2019; the Digital Innovation Observatory of Milan’s Politecnico has in fact found an 11% increase in electronic payments in the last year. Covid, in this case, has done nothing but speed up an already ongoing process. The ability to shop securely through digital tools in a period like this is definitely an element to consider when deciding to open a checking account.

Would you like to receive more information on the advantages offered by our online account? Visit our website or contact us, we will be happy to answer your requests.

Online account growth continues also in the US

In the United States, the possibility of accessing one’s online account from a PC or smartphone is nothing new: however, the Coronavirus has decisively contributed to the adoption of this practice by a large number of Americans. 

Only in April, there has been a surge in subscriptions to online banking platforms – around 200% more – and an 85% increase in mobile platform traffic. Traditional banks, on the other hand, had to deal with numerous requests from call centers, which generated, as expected, very long waiting times. The increase in requests for an online account is partly motivated by economic uncertainty: while in the pre-Covid era, Americans used to examine their financial situation once a week, with the onset of the pandemic they began to check their account several times a day. 

With the first reopenings there has been a partial return to branches, however, according to a recent survey by Novantas, only 40% of respondents plan to return to making payments and transactions at the counters, a sign that the change is radical. 

“Once people start using home banking services on a permanent basis, there is no going back. We expect consumers in the US to choose digital platforms to make a wide range of online transactions and payments,” says Maria Schuld, from the executive division of the North American banking services group FIS.

In addition to logins from mobile platforms, online current accounts and remote deposits are also on the rise; experts say that while compulsive checks of the financial situation are a passing trend, the massive approach to online banking, surprisingly accelerated by Covid, is here to stay. 

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Coronavirus and online account: an increasingly cashless society

One of the most obvious consequences of the Coronavirus epidemic is certainly the acceleration of the digitization process. What does this phenomenon entail? First of all, the possibility of managing an online account directly from home and making digital payments in complete safety.

At the moment the country that seems to have better internalized this trend is Sweden, often cited as the most cashless nation in the world, so much so that according to Niklas Arvidsson, professor of the Royal Institute of Technology, most of the stores in Stockholm even reject the cash for digital payments.

Australia is no exception, it has declared its intention to become completely cashless within a couple of years: an ambitious project that seems to have found an unexpected helper in Covid, which has significantly speeded up the process. According to the Reserve Bank’s 2019 Consumer Payments Survey, released last March, cash has gone from being the dominant payment method to barely covering a quarter of total transactions over the past ten years.

Similar situation in France, where digital payments are skyrocketing: about 68% of the population uses the smartphone to make transactions, a percentage that reaches almost 80% for the younger age groups.

The phenomenon has also involved a typically conservative country in the field of electronic money such as Italy, more and more favorable to online accounts and digital payments, which have undergone an increase in the last period also thanks to the introduction of mobile payments and contactless technologies. According to the Bank of Italy, achieving the ideal of a “cashless society” would represent a benefit for the entire social fabric, which is why the Budget Law 2020 provides for a series of measures to benefit the disposal of cash.

Would you like to manage your finances without having to leave the house? Take a look at our options for a simple, fast and above all secure online account.

Covid emergency: Europeans save money and rely on the online current account

After the Coronavirus breakout, savings rates are increasing and, thanks to banks digitization, more and more people are choosing to entrust their savings to an online current account. 

Among the objectives set out in the EU Recovery Plan, the desire for a digital transformation of the economic system stands out; the trend is growing so that the Bank of Italy has already noted an increase to 80% of people using Internet banking systems for financial management in 2019.

The reasons? An overall decrease in costs related to the account and the possibility to manage one’s banking situation comfortably from home. If you are interested in learning more, we talked about the benefits of an online current account during a pandemic in one of our previous articles. 

Another growing phenomenon, first reported by the Financial Times, is the increase in savings all over Europe, with data collected by the ECB and the Bank of England showing that savings rates have risen significantly in four out of five countries. The French case is one of the most emblematic, with more than 20 billion euros paid into current accounts, a trend that seems to have grown exponentially, reaching 60 billion in mid-May. In Italy, the amount of savings is close to 17 billion euros (compared to the 3.4 billion expected by the monthly average). Spain and Great Britain also follow the flow, with 10.2 billion euros and 13.1 billion pounds respectively. 

The trend could be justified by the increase in economic uncertainty, which has led many Europeans to set aside large sums of money to face the recession.

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Over three quarters of people in Europe are opening a current account

The trend in Europe is clear: there are more and more individuals who are opening a current account. According to a Learnbonds study, 409.46 million Europeans (or 77.74% of the population) have decided to entrust their savings to banks or credit institutions. 

The so-called “unbanked” subjects, ie without account, make up 22% of the population and are currently at the margins of a system that is moving more and more towards the digitization of resources and financial management.

Germany ranks first among the countries with the highest number of active accounts compared to the number of inhabitants, with a rate of 83.74%, followed closely by the United Kingdom, with a rate of 83.19%; France is in third place in the ranking, where 76.84% of the population opted for opening a current account. 

Secondly, we find a series of countries with a significantly lower population density, but with a high percentage of active current accounts, such as Malta, Estonia, and especially Luxembourg, with a banking rate of 85.25%. Among the most refractory countries we find Romania, where currently only 48.27% of the population has decided to open a current account.

What are the plausible reasons behind the choice of many Europeans? Certainly the very fact that the use of cash in Europe is on the decline, and the consequent need to adapt to a model that provides that salaries and pensions are credited through a current account; not to mention the growing trend of online purchases.

Currently lenders and banks are moving in an increasingly digital and smart direction; today opening a current account is a matter of a few minutes, and it’s possible to manage your financial situation quickly and efficiently directly from home.

Would you like to have more information about our online accounts and the features they offer? Visit the section of our site dedicated to personal accounts or contact our experts.

Is the wealth tax threatening the Italians’ online current account again?

“We are all aware that in Italy there are great private savings, and this is certainly one of the strong points of our economy. There are many projects, we’ll see in due course“.

This sentence, pronounced by the Italian head of Government Conte during the press conference on May 17, makes savers tremble again. After ruling out the idea of a possible forced withdrawal, is the Prime Minister having second thoughts?

Whether you have a traditional or online current account, every time a politician makes such a statement, the thought goes to “solidarity contributions” and to the impact they could have on the economy. Conte’s statements were ambiguous and would not exclude the hypothetical scenario of the dreaded wealth tax. This issue was also discussed during our CEO’s interview with Panorama, in which a borderless online current account was also mentioned. This could be one of the most effective solutions to overcome the problem and protect savings.

What if the Prime Minister only wanted to praise the strength of the Italian economy, which resides precisely in private savings, without necessarily wanting to take measures that jeopardize the savings of Italians? The doubt remains and so does the chaos, manifested on social media through messages like these: “Here begins to lay the foundations for a wealth tax“, “Don’t you dare to put your hands in our current accounts“, taken up by journalists such as V. Feltri who, in the pages of the Libero newspaper, spoke out against the words of the Prime Minister, recalling that in addition to the wealth tax, already implemented by the Amato government, there is also the threat of the injunction to purchase national bonds.

It is important to remember that at the beginning of the pandemic, the Democratic Party had proposed the hypothesis of a forced withdrawal from the current account, online or traditional, through a sort of Covid-Tax, to be applied in 2020 and 2021 to tax Irpef incomes over 80,000 euros and allocate subsidies to those most seriously affected by the Coronavirus. It was a sort of solidarity contribution that had been categorically excluded by the Prime Minister, who stated firmly, in the interview with La Stampa last May 3, that in a period of crisis “the State gives to Italians and does not take“. And he added: “I categorically exclude a wealth tax” because our country’s debt remains sustainable “in the context of very substantial private savings and a particularly strong resilience of our entire economic system“.

The truth is that the measures that are going to be taken to deal with the economic problems that are afflicting the country are not yet well known and many Italians are still not sure whether their online current account is safe.

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More and more enterprises are choosing an online business account

Many companies, especially in the last period, due to the Covid-19 emergency, have decided to focus on an online business account, to optimize timing and to manage the account quickly, efficiently, and without time or need constraints to carry out operations on site.

Having overcome the initial skepticism towards online accounts, many companies have decided to convert to digitalization to benefit from the advantages that come from using the Internet to manage finances and bureaucracy; here are some:

Greater hourly flexibility

One of the most interesting advantages for those who decide to open an online business account is the possibility of carrying out operations without the limits imposed by the respect of the canonical hours of credit institutions and banks.

In addition to the greater flexibility, another of the advantages deriving from the online management of company accounts is certainly the saving of time (travel from the company to the bank, queues at the counters etc.).

Beyond the physical institution

In recent months many companies have had to deal with the need to work remotely; online accounts allow, among others, access to the platforms dedicated to managing finances regardless of where you are.

Ease of use

The use of an online banking platform or app is simple and intuitive; many institutions offer the possibility to insert different credentials to allow more people to carry out operations, download bank statements and send multiple transfers.

Opening a company account on the Internet requires a few clicks and is the ideal solution for those who have limited time to dedicate themselves to bureaucracy (for example when starting a business). Another advantage is certainly the possibility of contacting Customer Service via email or chat or referring to a list of FAQs (Frequently Asked Questions), certainly a faster solution than the canonical visit to the branch.

For more information to open with us an online business account tailored to the needs of your business, contact our experts.